Element Global Value

May 2013

The Element Global Value Portfolio has the mandate to go anywhere in pursuit of attractive investment opportunities, using a bottom-up investment approach. Being equity focused, the portfolio has at least 70% of its assets invested in international equity markets. The portfolio uses as benchmark the MSCI World (Local) but it does not seek to mimic or track this index in any way.

Portfolio Details
Net Asset Value (NAV) : 107.52 Launch date: Portfolio Manager: 14-January-2011 Filipe Alves da Silva, CAIA
120 110 100 90 80 Jan/11

Weekly Performance Chart

MSCI World Local Portfolio

Jul/11

Dec/11

Jun/12

Nov/12

May/13

Monthly Performance
Jan 2011 2012 2013 -1,11% 7,06% 2,90% Feb 1,61% 5,19% 0,47% Mar -2,05% 1,62% 1,33% Apr 3,30% May Jun Jul Aug Sep Oct 8,70% -1,50% Nov Dec YTD -1,25% -1,72% -1,37% -7,23% -7,20% 2,62% 0,62% 2,67% 1,35% -2,83% -1,18% -12,57% 0,97% 0,87% 13,73% 8,12%

-0,86% -6,98% 1,51% 1,68%

Investment Highlights

While reading Khrom Capitals latest report, I came across a quote from Benjamin Franklin that I immediately related to: Either write something worth reading, or do something worth writing. If you read the last report you know I struggled with the first part, but I can assure you that I continue hard at work on the second! Despite having delved into quite a few companies in the last two months, they either didnt have the characteristics I look for in a company, or their price was not at a level that offered a comfortable margin of safety, so no new investments were made in this period. To avoid writing a report when I have nothing new to add, and above all, to avoid the temptation of rushing research just to have something to write about, I will start producing this report on a quarterly basis. The June report will still be in the monthly format, but the following one, in September, will be in the quarterly format. Back to the portfolio, the only change made during the month was an increase in the position in the Alternative Asset Opportunities Fund. I detailed my thesis for this investment (close end fund of traded life interests or life insurance policies) in the January report. At the current price, my expected 3 year IRR is now close to 20%. I expect the discount to NAV to start correcting as the bulk of maturities approaches (2016-2018). In May the portfolio performed slightly better than the World Equity composite. Despite this, it is still behind for the year.

Element Global Value

Investment Guidelines
Max. Long Exposure: Min. Long Exposure: Position Sizing (Long): Use of Derivatives: 130% 70% Max Position 10% (at purchase) May use options or warrants (Max notional exposure of 20%) Max individual position 2.5% Max gross short exposure 30% Hedged on a best effort basis

Largest Positions
Name
i Sha res MSCI Worl d ETF Hedged IBM Mi cros oft Corpora ti on Fi del i ty Chi na Speci a l Si tua ti ons Appl e Inc Peps i Co Berks hi re Ha tha wa y Al terna ti ve As s et Opportuni ti es BMW Bl a ckRock

Weight
10,5% 9,6% 7,0% 6,3% 5,9% 5,6% 5,0% 4,3% 4,3% 3,7%

Ability to Short:

Currency Hedging:

Total TOP 10 Positions

62,1%

Allocation by Sector
Cash Other Utilities Telecommunication Services Materials Health Care Consumer Staples Consumer Discretionary Energy Industrials 2,2% 1,3% 30,0% 13,0% 0% 5% 10% 15% 20% 25% 30% 35% 2,7% 5,4% 12,6% 17,5% 0,4% 5,3% 2,6% 6,9%
Cash Others Switzerland Australia Japan Kazakhstan United Kingdom Brazil Ukraine Israel Spain Germany France Canada China United States 0% 2,6% 1,8% 0,4% 0,4% 0,9% 0,7% 1,1% 0,8% 1,7% 3,3% 4,4% 4,6% 5,0% 4,2% 7,9%

Allocation by Country

Information Technology
Financials

60,0% 10% 20% 30% 40% 50% 60% 70%

Currency Exposure
120% 100% 80%
98,8%

Contacts
For more information please contact Filipe Alves da Silva directly or send anemail to element.cap@gmail.com

60% 40% 20%

0%
-0,4% 6,8%

Disclaimer
0,8%
4,1% 1,7% 1,3%

-20%

-13,8%

This report is based on my portfolio. Reference to specific securities should not be construed as a recommendation to buy or sell these securities. You should always conduct the due diligence yourself.

-40%
EUR USD CNY BRL CAD GBP UAH HKD

E L E M E N T

Element Global Value

Complete List of Holdings

Name
iShares MSCI World ETF Hedged IBM Microsoft Corporation Fidelity China Special Situations Apple Inc PepsiCo Berkshire Hathaway Alternative Asset Opportunities BMW BlackRock Archer Daniels Midlands Lowe's Teva Pharmaceuticals Chatham Lodging Trust Renault Corning Inc Amadeus IT Holdings Telefnica Societe d'Edition de Canal+ Avangard IMAX Corporation PAX Global Technology OPAP Jakks Pacific Monument Mining MRV Engenharia KazMunaiGas E&P Energold Drilling Cninsure Calfrac Well Services Patient Safety Technologies GAP Inc Veris Gold Corp Ted Baker Addvantage Technologies Cash

Weight
10,5% 9,6% 7,0% 6,3% 5,9% 5,6% 5,0% 4,3% 4,3% 3,7% 3,5% 3,4% 3,3% 2,6% 2,4% 2,2% 2,2% 2,2% 2,2% 1,7% 1,2% 1,1% 1,0% 0,8% 0,8% 0,8% 0,7% 0,7% 0,5% 0,5% 0,4% 0,4% 0,3% 0,3% 0,2% 2,6% 100,0%

Total

Note: Reference to specific securities should not be construed as a recommendation to buy or sell these securities. You should always conduct the due diligence yourself.